Towards a sensible land policy

The Rs 100,000 car project of the Tatas in Singur in West Bengal has raised much controversy about the use of prime agricultural land for industrial projects. The extension of that approach to the SEZ of the Salim Group of Industries of Indonesia in Nandigram has caused even greater conflict. They are symptomatic of a much larger issue - that of the policy to be adopted regarding land use patterns. This is reflected in the context of the SEZs.

Land has always been a central politico-sociological obsession along all classes in our country. For example, when central and state public enterprises were set up in a massive way during 1960-1990 - some 130 central companies were set up during that period - the economic ministries, which were the promoters of those enterprises and their plants, and the top managements of the enterprises sought land from state governments.

• India's great rush for SEZs

Those governments, keen on attracting major central PSEs, were only too willing to provide huge tracts of land and free at that! Neither undertook any detailed analysis as to whether such huge tracts were actually needed. All worked on the assumption that there would never be any shortage of land.

Over the past 60 years, more and more agricultural land has been converted by the state governments into industrial land without a thought about national food security and environmental protection.

There is, therefore, an urgent need to immediately design and implement a comprehensive land use policy.

First, the central government must prepare a nationwide land use plan, similar to the Master Plans for metropolises like Delhi and Mumbai. This should be done by a central Task Force, in consultation with each state government, using the maps of our natural resources generated by the remote sensing satellites of ISRO.

Second, state governments should be asked by the Planning Commission to prepare much more detailed intra-state land use plans, to be cleared by the Planning Commission with, say, a 15-year time horizon. Thirdly, such a plan should be notified under as many central Acts as are relevant.

There are people who say if industrial complexes come up on farm land, the nation's food, fodder and rural energy security will be jeopardised. Such thinking misrepresents the interests of farmers and workers in the farm sector.

The line of West Bengal Chief Minister Buddhadeb Bhattacharjee that the process of industrialisation is irreversible is a diversionary tactic. The issue is not one of industrialisation versus agriculture.

It is one of ensuring that the land on which units are coming up is not prime agricultural land, or forests, or close to critical water bodies and fragile eco systems. The country has some 80 million hectares of 'waste land' with zones of such land occurring in practically every state.

The most degraded of these lands should be the ones on which industrialisation should be permitted. If such land needs infrastructure, private entrepreneurs who want to locate units in such land could be provided with financial/commercial incentives.

This had been a standard practice in the case of many public enterprises in the 1948-1990 era, the only difference being that no tax sops were given to them, with the result that large infrastructure development costs were included, unfairly, in the project costs, severely violating the commercial viability of the PSEs.

In the case of the Mankapur digital telecom switching systems plant of ITI in the backward district of Gonda in eastern Uttar Pradesh, ITI had to build not only access roads but even culverts and bridges and a self-contained township.

This was preceded by the even more extreme case of the Mig Aero engine plant of Hindustan Aeronautics Ltd being located in the backward tribal district of Koraput in Orissa as far back as the early-to-mid 1970s. So, there has been a well established policy and practice in regard to reconciling the imperative needs of not allocating prime agricultural land for industries.

The fact that it has taken months of agitation for Bhattacharjee and even the Prime Minister to come up with ameliorative measures does not speak well of the sensitivity of our political leadership. Bhattacharjee has recently proposed amendments to the existing rules for SEZs. They look eminently reasonable.

The tragedy is that he did not come out with them earlier. The PM for his part has indicated in Parliament that a comprehensive resettlement and rehabilitation policy package with some central funding is also being worked on. With luck, this should serve to defuse tensions in Singur and Nandigram.

There is also a message for industrial houses. They, and governments, have to hasten slowly taking all human societal, agricultural, horticultural and ecological-cum-environmental factors into account in accordance with an SEZ Impact Assessment Plan like the Environmental Impact Assessment Plans. There is also an urgent need to undertake a comprehensive set of amendments to the SEZ Act.

A major criticism of the SEZs is that they are zones centred on commercial transactions related to land. At another level a central criticism of the era of the so-called 'licence-permit raj' was that the criteria of issuing industrial licences were extremely opaque.

It was argued by the proponents of the economic reforms launched in 1991 that such reforms removed opacity and made economic decision mainly by the government transparent.

But where is the transparency in the case of approvals or rejections of applications by business houses to set up SEZs? There are no published criteria or guidelines governing such decision making. What will be the value added in the industrial and service projects to be located in the zones?

All we have got is the finance minister's statement that the finance ministry had computed that the 231 SEZs approved till date will involve a foreign exchange outflow of around Rs 200,000 crore (Rs 2,000 billion) over the first ten years of their operation.

Not many in the country know that when China launched its SEZ Programme in the mid 1980s, the Chinese government approved setting up only 53 SEZs. It was only after their experience with those 53 that the Chinese raised the number to 170 in 1995.

Let us, therefore, follow the Chinese strategy, implement not more than 50 SEZs, learn fully and carefully from our experience and then move forward slowly to yet more zones incorporating what we have learnt from the first batch.